(Adds that China Power's five mainland-listed units issued
exchange filings on merger)
By Pete Sweeney and Charlie Zhu
SHANGHAI/HONG KONG Feb 4 China Power Investment
Corp is merging with the State Nuclear Power Technology Corp, as
Beijing drives consolidation in its rapidly expanding nuclear
power sector with the aim of eventually exporting reactors.
The Chinese power producer currently controls about a tenth
of China's nuclear power market, while the State Nuclear Power
Technology Corp was formed in 2007 to handle nuclear technology
transferred from U.S.-based Westinghouse Electric Co.
A merger between the two would create a firm with total
assets of more than 600 billion yuan ($96 billion), industry
"The merger will help them expand in China, and the overseas
market in the long run," said Francois Morin, Beijing-based
China director of World Nuclear Association.
All of China Power's five mainland-listed units, including
Shanghai Electric, Jilin Power and
Dongfang Energy, announced on Wednesday that they
had received notice from China's Assets Supervision and
Administration Commission on the merger.
A detailed proposal on the merger has yet to be finalised,
they said in filings with the mainland bourse. Shares of the
mainland-listed companies soared on the news.
Officials at China Power and State Nuclear Power could not
be reached for comments.
Beijing said in January that it would aid the overseas
expansion of Chinese firms, in particular in the rail and
nuclear power sectors, raising hackles with some trading
partners who fear it signals another wave of subsidized Chinese
China, which now primarily provides financing and
construction services to nuclear power projects overseas, is
expected by some experts to start exporting reactors after 2020
and become a major exporter by 2030 when it has fully digested
foreign technology and developed its domestic industry.
The global nuclear market is currently dominated by firms
such as France's Areva, Russia's Rosatom State
Nuclear Energy Corp and Japan's Toshiba Corp, which
TOP NUCLEAR POWER MARKET
China Power Investment, parent of Hong Kong-listed China
Power International Development, is one of China's top
five independent power producers with total installed capacity
of around 90 gigawatts (GWs), a fraction of which is nuclear
The tie-up is logical given China Power Investment's
relatively weak nuclear expertise but financial muscle, said
Consolidation of the nuclear sector is seen as a key to
Chinese companies acquiring the scale to compete abroad.
Similar mergers are being contemplated for China National
Nuclear Corporation and China General Nuclear, which could lead
to the development of an export market for their joint reactor
design, the Hualong I model.
China General Nuclear is the state-owned parent of CGN Power
, which raised $3.2 billion in an initial public
offering in Hong Kong in December. The group is currently the
largest nuclear power producer in China with a 44 percent share
of the market, followed by China National Nuclear Corporation
with 18 percent and China Power Investment with 10 percent,
according to Jefferies research report.
Unlike some other industries where China has tried and
failed to use foreign technology transfers to create domestic
champions, analysts say China has been successful at trading
access to its growing nuclear market for access to key
technologies from foreign companies.
Westinghouse Electric Co has already handed over most of the
intellectual property for its AP1000 reactor design to the State
Nuclear Power Technology Corp.
With 22 reactors in operation, and a further 26 under
construction, China is the world's largest nuclear power market.
It aims for an installed nuclear power capacity of 58 GWs by
2020, up from the current 18 GWs, under a programme estimated to
cost $100 billion.
($1 = 6.2480 Chinese yuan renminbi)
(Editing by Ed Davies and Tom Hogue)